OIG Audit: Custodial Workhours

Objective

In July 2014, the Postal Service and the American Postal Workers Union entered into a Memorandum of Understanding (MOU) regarding custodial workhours. The MOU dictated that custodians receive additional compensation when certain facilities fail to use 90 percent of their calculated annual custodial workhours. These hours are based on facility size and designated cleaning frequencies. As of the end of fiscal year (FY) 2018, there were 8,955 facilities subject to this MOU, including processing and distribution centers, post offices, stations, and branches.

Postal Service Maintenance Series Handbook MS-47 and Transmittal Letter 5 detail the process for calculating a facility’s annual custodial workhours, which are documented on Line H of Postal Service Form 4852, Workload Analysis and Summary. At fiscal year-end, facility management performs a reconciliation by comparing total actual custodial workhours shown in Labor Distribution Code (LDC) 38 to 90 percent of calculated annual custodial workhours shown on Line H of PS Form 4852 to determine compliance with the MOU requirement. Facilities that do not comply with the requirement are required to compensate custodians at the overtime rate via the grievance process.

Our objective was to assess compliance with the custodial workhour requirement to use 90 percent of calculated annual custodial workhours. The scope included custodial workhours for FYs 2015 through 2018 for the facilities subject to the MOU.

What the OIG Found

Facility management did not consistently meet the MOU requirement to use 90 percent of annual custodial workhours at all applicable facilities. Specifically, between FYs 2015 and 2018, 584 of 8,955 facilities (7 percent) did not meet this MOU requirement. Collectively, this equated to 791 MOU-related grievances, 7,949 grievance payments, 5,568 impacted employees, and $19.9 million in compensation paid at the overtime rate. Additionally, as of September 2018, there were another 409 open MOU-related grievances currently in the grievance process pending resolution, with some grievances being open since January 2015.

Conversely, 6,933 of 8,955 facilities (77 percent) exceeded 100 percent of calculated annual custodial workhours during the same period. In addition, management did not always ensure the accuracy of workhours reported in LDC 38, which represents custodial workhours. To assess accuracy, based on a statistical sample of 8,417 of 133,217 total workhours, which represented 5,509 workhours charged by custodians and 2,908 workhours charged by non-custodial employees:

  • Custodians charged 24 percent (1,311 of 5,509) of workhours, or 28,802 workhours projected over the universe, to incorrect LDCs.
  • Non-custodial employees incorrectly charged 46 percent (1,350 of 2,908) of workhours, or 5,663 workhours projected over the universe, to LDC 38.

Staffing challenges were a primary factor contributing to facilities not meeting the MOU requirement, including vacancies, long-term leave usage, inability to augment custodial work with temporary employees, and custodians doing non-custodial work.

By not meeting the MOU requirement for FYs 2017 and 2018, we determined the Postal Service incurred questioned costs of $8.4 million annually. Going forward, the Postal Service risks incurring another $16.1 million annually in costs for FYs 2019 through 2022, if failure to meet the MOU requirement continues.

Finally, when workhours are not charged to the appropriate LDC base operation, management cannot obtain an accurate account of effort required/incurred for specific tasks. In this instance, inaccurate reporting of LDC 38 could have a significant impact on a facility’s compliance with the MOU requirement.

What the OIG Recommended

We recommended management develop a strategy to address hiring and staffing challenges for custodial positions at facilities subject to the MOU and implement an oversight mechanism to hold managers accountable to the existing policy to periodically assess the accuracy of workhours charged to LDC 38 in the Time and Attendance Collection System.

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